1. Field of Invention
The present invention relates to a method and system for identifying transformation candidates and transforming a business organization.
2. Background Information
When executives of troubled companies fail to act in time or fail to act at all their company's performance may keep degrading until the company's market valuation drops suddenly and very publicly. This may happen to companies large and small. Most companies may experience a challenge that may be significant enough to require substantial changes to the way they conduct business.
There have always been businesses in trouble, and in response, companies are constantly undergoing some form of reorganization. However, in most cases the changes are merely tactical, mostly limited to region-specific or product-specific cost cutting programs. Many of these programs may be far from successful. One reason for this may be that the changes may not fundamentally realign or redesign the underlying business model. Another reason may be that in many cases companies may respond too late to the first signs of trouble. In other words, the changes may have been implemented after the company's valuation had substantially eroded. In some cases, the lag time between the beginning of the problems and the point of no return can stretch from 18 months to as long as four years. This may lull executives into thinking that although things are not great, there may be no crisis even though in reality there is a crisis.
Once a company begins its downward spiral in performance and resulting market valuation, the downward spiral may persists for years. Moreover, even where a struggling organization does stabilize, additional time may be needed to regain the trust of investors. This may be true even where the company can demonstrate rising cash flow, earnings recovery, fattening order books, and more. The trust of the capital markets may be lost and in some cases, it may never come back.